Auckland International Airport Limited · NZX:AIA
Auckland International Airport — Non-Deal Roadshow (September 2010)
37 slides from Auckland International Airport's roadshow presentation, Sep 7, 2010
Slide 1: Australian road show presentation
Auckland International Airport Limited Australian road show presentation 7-9 September 2010 1
Slide 2: Contents
Contents Auckland Airport strategy and market dynamics The 2010 financial results Drivers of growth: 2011 and beyond Appendix – 2010 financial results in detail 2
Slide 3: Reinventing our business
Reinventing our business Re-focused from airport infrastructure manager to a sales- led engine of economic growth Redirected resources into promoting New Zealand as a destination to fuel growth in travel, trade and tourism Expanded Australasian footprint to increase influence with airlines and agenc
Slide 4: 2009 saw growth strategy launched
2009 saw growth strategy launched The primary goal of our strategy is to accelerate business growth at Auckland Airport In 2009 travel demand and economy was at a low and we weren’t sure where was bottom Extra investment in air-services development had yet to bear any significant fruit Lean Six Sigm
Slide 5: The market has changed in 2010
The market has changed in 2010 Travel demand beginning to rebound June 2010 vs. June 2009 from recession Revenue Available pax km seat km Growth economies (especially Asia) Africa 21.3% 12.1% becoming increasingly important Asia/Pacific 15.5% 4.4% Aviation sector still challenged but in Europe 7.8%
Slide 6: The plan is coming together
The plan is coming together High passenger satisfaction - 9th best airport in world in Skytrax Significant air-service sales achieved: • More than 850,000 additional international seats announced for Auckland • More than 800,000 additional international and domestic seats announced for Cairns & Mack
Slide 7: The plan is coming together
The plan is coming together Auckland international terminal retail development and new Cairns domestic terminal nearing completion Property development accelerated – land-use clarified and now over $115 million worth of property development underway at Auckland Lean Six Sigma, new technologies, and
Slide 8: Key figures – June 2010
Key figures – 30 June 2010 13.4 million travellers each year: 7.4 million international, 6 million domestic 24 million passengers a year – the forecast for 2025 1.3 million transit passengers a year 72% of all international visitors to New Zealand arrive or depart from Auckland 18 international pass
Slide 9: The 2010 financial results in full
The 2010 financial results in full 2010 2009 % $m $m Change Income 363.1 368.3 -1.4 Expenses 86.8 88.9 -2.3 EBITDAFI (Earnings before interest, taxation, depreciation, 276.3 279.4 -1.1 fair value adjustments and investments in associates) Share of profit of associates 0.1 0.9 -89.7 Investment proper
Slide 10: Drivers of growth: 2011 and beyond
Drivers of growth: 2011 and beyond Achieving air services development success Growing airline passenger capacity to drive future passenger growth Increasing aeronautical revenue Improving retail yield Investing in property development Investing in strategically aligned airports to further increase p
Slide 11: Air services development achieving success
Air services development achieving success Providing detailed analysis of opportunities Partnering with key influencers who can develop demand and air service connections Investing in campaigns to stimulate market demand in core segments to shape a route/market Market Development Successfully buildi
Slide 12: Growing Auckland international capacity
Growing Auckland international capacity New service Singapore Mar 2011 220,000 New service Melbourne Dec 2010 130,000 New service Cairns Apr 2011 56,000 New service Houston Nov 2011 138,000 Upgrade (A340 to 777) Melbourne Aug 2010 72,000 Brisbane Dec 2010 72,000 New service Cairns Mar 2010 37,000 In
Slide 13: Growing Cairns & Mackay capacity
Growing Cairns & Mackay capacity New service Osaka Apr 2010 126,000 New service Sydney Apr 2010 63,000 Increased frequency Melbourne Apr 2010 128,000 Increased frequency Sydney Apr 2010 128,000 Increased frequency Adelaide Mar 2010 36,000 Increased frequency Perth Mar 2010 36,000 New service Aucklan
Slide 14: Increasing aeronautical revenue
Increasing aeronautical revenue 14
Slide 15: Improving retail yield
Improving retail yield 2010 retail revenues impacted by construction disruption Completion of duty-free stores on departures in May reduced disruption impact on this category and showing strong initial results Some disruption still expected in FY11 but impact more modest and benefits of completed wo
Slide 16: Improving retail yield
Improving retail yield Increasing the quality of airside retail space in the international terminal One of the most generous duty free allowances in the world Departure retail redevelopment on track for completion in December 2010 Refreshed retail stores and improving the propensity to dwell in prim
Slide 17: The property proposition
The property proposition Auckland Airport has a significant, strategically located land asset – 1,500ha of freehold land Airport Business District with seven precincts that focus on specific land-use types to cater for particular businesses and industries 17
Slide 18: The property proposition
The property proposition VALUE – highly competitive property package options delivered by a driven experienced property team FLEXIBILITY – tailor made property solutions to suit individual business and industry needs SECURITY – financial and operational security in a 24/7 airport community QUALITY –
Slide 19: Investing in property development
Investing in property development Project Construction Value Auckland Airport Expected ($m) Construction Cost Completion ($m) Mercedes 3.0 3.0 Mar 2011 DSV Air and Sea 3.8 3.8 May 2011 Aviation Travel and Training 3.5 3.5 Jun 2011 NZ Food Innovation Centre Manukau 7.9 7.9 Aug 2011 Aviation Security
Slide 20: The new Auckland Airport land use plan
The new Auckland Airport land use plan 20
Slide 21: The new Auckland Airport land use plan
The new Auckland Airport land use plan Master planning review complete Northern runway construction deferred for a few more years New roading plan developed to avoid uneconomic roading construction Aeronautical master plan working in conjunction with property master plan to maximise total opportunit
Slide 22: Strategic investment - NQA
Strategic investment - NQA Highlights: • Technical Services Agreement with QAL terminated • Pacific Blue entered and Jetstar announced to enter direct Auckland to Cairns services. • Substantial increase in capacity added or announced from March 2010 (over 800,000 seats) • Dividends paid to Auckland
Slide 23: Strategic Investment – Queenstown
Strategic Investment – Queenstown 24.99% investment in Queenstown Airport ($NZ27.7 million) A strategic alliance to boost New Zealand tourism, an agreement to collaborate on air services development and destination marketing as well as pursue joint initiatives in aeronautical, retailing and property
Slide 24: Operating leverage at work
Operating leverage at work Restructuring in 2009 set platform for focus on proactively managing costs Restructuring costs substantially lower in 2010 by $3.1m Cost savings in other expenses of $3.0m achieved across a range of expense items $2.7m of the $3.0m savings redirected to the marketing of ai
Slide 25: Capital expenditure
Capital expenditure Total capital expenditure at $54.3m down 38.0% from prior year and broadly in line with depreciation Significant change in capital expenditure from aeronautical investments in capacity, to profit- oriented non-aeronautical investments Actual Forecast 2010 2011 $m $m Aeronautical
Slide 26: Regulatory path clearing
Regulatory path clearing Draft determination of Commerce Commission released 31 May 2010 Land valuations based on market value alternative use (MVAU) with revaluations going forward Land held for future use is included in regulated asset base when commissioned (including holding costs) Final determi
Slide 27: 2011 and beyond: cleared for take-off
2011 and beyond: cleared for take-off We expect 2011 profit in the range of $112 to $118 million assuming international passenger growth in the order of 5% (excluding any fair-value changes and other one-off items) Double digit profit growth is a possible outcome of strategy by: Growing airline pass
Slide 28: Questions please
Bilaipon® QUESTIONS PLEASE Biiicsand Bl aicon Top 10 Airport 2009, 2010
Slide 29: Appendix – Financial Results in detail
Appendix – Financial Results in detail 29
Slide 30: Passenger volume growth in 2010
Passenger volume growth in 2010 Strong domestic passenger volume with 7.8% growth International passenger numbers grew from September 2009. Full year international passenger (excl Transits) growth of 2.4% Particularly strong trans-Tasman with 10.6% growth Asian passengers in the second half of 2010
Slide 31: Resilient international markets
Resilient international markets Additional trans-Tasman carriers and routes increased Australia arrivals to 19.5% (2009: 18.1%) of all international arrivals Asia and North America have been resilient through the downturn, maintaining percentage of arrivals at 10.1% and 6.1%, respectively Arrivals f
Slide 32: Aircraft movement trends
Aircraft movement trends Airline fleet management has, in general, seen more frequent, smaller aircraft on international routes and less frequent, larger aircraft on domestic routes Pacific Blue have announced their withdrawal from domestic routes in October 2010. In 2010, Pacific Blue domestic MCTW
Slide 33: Strength in our core revenues
Strength in our core revenues Growth in international passenger 2010 2009 % and price increase deliver a 10.1% $m $m change increase in PSC Airfield 66.7 70.5 -5.3 Deferral of airport charge increase Passenger services charge 73.3 66.5 10.1 to 1 March 2010 had $2.7m impact on airfield charges Termin
Slide 34: Underlying profits held up
Underlying profits held up 2010 2009 % change $m $m Reported net profit after tax 29.7 41.7 -28.8 Investment Property Revaluation (9.5) 64.6 Restructuring costs - 4.2 Deferred tax adjustment 84.4 - Tax effect 0.4 (4.6) Underlying Profit 105.1 105.9 -0.8 The deferred tax adjustment of $84.4 million i
Slide 35: Stable balance sheet
Stable balance sheet Two bond issues in FY10 raising $150 million at very attractive pricing S&P rating A- /A2 (stable outlook) Management are already looking at refinancing options for maturities in the next 12 months Modest increase in debt with investments also funded by Debt is based on contract
Slide 36: Robust debt ratios
Robust debt ratios 2010 2009 Average Interest Rate 6.86% 7.52% Underlying EBITDA interest cover ratio 3.73 3.57 Average debt maturity (years) 3.17 3.30 Debt to Debt + Equity 36% 37% Fixed interest rate exposure 74% 79% Reduced percentage of fixed rate debt enables benefits from lower interest rates,
Slide 37: Dividends and the DRP
Dividends and the DRP Final dividend of 4.45 cps, bringing total dividend for the year to 8.2 cps Dividend payout ratio of 102% of underlying profit. Formal dividend policy remains at 90% Record date for dividend is 8 October 2010 to be paid on 22 October 2010 Launched DRP for the first time in Marc
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